As disclosed by FINRA, former Aegis stockbroker Robert Buffington (CRD# 5220332) has been named or otherwise involved in four customer disputes since 2018. Allegations against Mr. Buffington in connection with these disputes include unsuitability, breach of fiduciary duty, and excessive trading or account churning. Mr. Buffington entered into the securities industry in 2007, and from 2010 to October 2019, he was affiliated with Aegis Capital Corp. (Aegis) in its New York City office.

According to FINRA BrokerCheck, three of the customer disputes against Mr. Buffington remain pending and one has settled. With regard to the settled matter, the customer alleged “unauthorized trading and unsuitable investment recommendations.” This matter settled for $136,982. Of the three pending disputes, two matters concern allegations of account churning.

When a brokerage firm or financial advisor has actual or de facto control over a customer’s account, then the broker-dealer and financial advisor must meet a quantitative suitability obligation. Simply put, the broker must have a reasonable basis to believe that a series of recommended transactions, even if suitable when viewed in isolation, are not excessive and unsuitable for the customer when taken in the aggregate. While no single test defines excessive trading activity, certain factors including the turnover rate, the cost-equity ratio, and a pattern of in-and-out trading in a customer’s account may rise to the level of violating the quantitative suitability obligation.

Under FINRA Rule 2111 (Suitability), brokers must ensure that their investment recommendations are suitable, by considering a host of factors including a customer’s investment objectives and risk profile, as well as financial circumstances and liquidity needs. Brokers and brokerage firms also must perform adequate due diligence on an investment before it is recommended to a customer. In addition, brokerage firms such as Aegis have a legal obligation under FINRA Rule 3010 (Supervision) to ensure that their employees are adequately supervised. In this regard, brokerage firms must take reasonable steps to ensure that their brokers follow applicable securities rules and regulations, as well as adhere to the firm’s internal policies. In those instances when a brokerage firm fails to adequately supervise its brokers, the firm may be held liable for losses suffered by investors.

The attorneys at Giarrusso Law Group LLC have extensive experience with handling all manner of claims related to investment losses. Investors may pursue claims to recover monies through securities arbitration or, in some instances, through litigation. Investors who have suffered losses with Robert Buffington, or another broker, may contact our office by telephone at (201) 771-1115 or by email at info@gialawgroup.com for a no-cost, confidential consultation to learn more about their legal rights.